08-31-2022 icon

FBI Warns Defi Users About Safety Risks

By Lucy Adegbe

A public service announcement published by the Federal Bureau of Investigation (FBI) summarized a caution addressing decentralized finance protocols to double up their protection standards and shareholders to be mindful of the susceptibility of these protocols. 

The investigation authority’s warning has followed the series of recorded cyber criminal activities that have caused many shareholders to lose lots of cryptocurrencies.

97% of the $1.3 billion that have been embezzled from the cryptocurrency space between January to March 2022 has been done through these Defi protocols, the United States blockchain-based reviewer company Chainalysis confirmed. 

Amongst the various prominent attacks recorded in the earlier months of this year is the Ronin bridge exploit in which $625 million worth of digital currencies were embezzled. 

Also, the FBI noted various formats in which the criminals have adopted to exploit Defi platforms like the smart contract alteration and the performance of leveraged exchanges by manipulating the protocols’ “single price oracle” utilization. 

The Bureau recommended that Defi protocols may need to employ data logic, due trials as well as detailed observations. There have to be mapped out strategies to fix any exploits and notify shareholders, the bureau further mentioned. 

As much as every investment comes with an inevitable risk portion, shareholders may need to consider certain financial investment rationale or seek the guidance of an approved economic counsel before taking investment steps, the FBI highlighted.